Economics 0455 · IGCSE · Firms’ costs, revenue and objectives
Firms’ costs, revenue and objectives — practice question
Singapore is often placed among the top countries for doing business. It has an open economy that trades freely. It also has a track record of strong entrepreneurship, low unemployment, low average costs and relatively low tax rates. Its example could persuade other countries to cut back trade restrictions.
(a)[2]
Define what is meant by ‘average costs’.
(b)[4]
Explain two influences that would increase the supply of entrepreneurs in an economy.
(c)[6]
Analyse how the market for a product would change after a cut in the tax on the product together with a fall in the price of a complement.
(d)[8]
Discuss whether low unemployment in a country will persuade multinational companies (MNCs) to locate there.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Total cost per unit of output” …